Inheriting Tenants: Instant Cash Flow or Huge Headache? (Rookie Reply)

Summary

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Real Estate Rookie – Episode Summary

Podcast: Real Estate Rookie
Hosts: Ashley Kehr & Tony J Robinson
Episode: Inheriting Tenants: Instant Cash Flow or Huge Headache? (Rookie Reply)
Date: December 5, 2025

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Overview

This episode addresses three real-world challenges that rookie real estate investors frequently face: partnership structuring (especially when one partner brings capital and the other brings skills), inheriting tenants in a house-hack or multifamily purchase, and scaling short-term rental (STR) portfolios amidst headwinds in the market. Hosts Ashley Kehr and Tony J Robinson answer questions pulled directly from the BiggerPockets forums, giving actionable advice, hard-won anecdotes, and practical mindsets. The episode focuses on helping early investors navigate common pitfalls and uncertainties with confidence and clarity.

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Segment 1: Structuring Partnerships When One Partner Has No "Skin in the Game"

[00:30–06:50]

Discussion Points

• Equity Partnerships vs. Debt Partnerships:

  • Tony clarifies that in an equity partnership, both partners share upside and downside; there’s no obligation for one partner to “pay back” the other if the deal goes south.
  • If the capital partner wants more protection, becoming a debt partner (private lender) may make more sense, providing a promissory note and a lien on the property.

• Combining Structures:

  • Ashley suggests that it’s possible to structure a deal to be both a debt and equity partner—getting interest plus some ownership—but cautions about giving up too much early on.
  • Flexibility is key: "You can set up the partnership any way that you want. But typically in an equity partnership, you guys are sharing in both the upside potential of that deal and the downside potential of that deal." (Tony, [02:59])

• Mitigating Risk:

  • Add clear performance expectations and remedies to the operating agreement (e.g., what happens if the contractor partner fails to deliver).
  • Consider clauses allowing the money partner to replace the contractor if they miss milestones or deadlines.

• Bottom Line Wisdom:

  • Tony: "The best solution if you've already got some question marks, is just to be a straight up debt partner. That'll simplify this in a way that I think allows you to sleep a little bit easier at night." ([06:24])

Notable Quotes

• “Be very confident and you know, the difference between the responsibility of being a debt partner compared to being an equity partner. But I think in this scenario that you have the opportunity to be both.”
  — Ashley ([03:56])
• “There’s no right or wrong way to structure a partnership. It's really more about what the two of you feel most comfortable with.”
  — Tony ([05:35])

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Segment 2: Inheriting Tenants—Smooth Cash Flow or Headache?

[09:10–20:43]

Discussion Points

• Understanding FHA Owner-Occupancy:

  • Ashley clarifies that FHA only requires you to live in one unit of a duplex—there’s no need to vacate the entire building.

• Inheriting an Existing Tenant:

  • It can be a positive or negative experience. You didn’t screen the tenant and don’t know their habits, credit, or expectations.
  • Ashley shares personal stories: one inherited tenant became a “wonderful, wonderful tenant” ([11:27]), while others she had to evict quickly.

• Negotiation and Legal Realities:

  • Difficult to remove tenants with active leases without legal cause in most states.
  • Options for buyers:
    • Ask the seller to vacate the unit (risky for sellers).
    • Offer “cash for keys” to incentivize the tenant to move out early.
    • Wait until lease end, then non-renew—check state laws first.

• Seller and Buyer Perspectives:

  • Sellers are wary of vacancy risk if the sale falls through.
  • Buyers should set a plan for lease expiry, factor in the lease term, and consider condition and cooperation of units and tenants before purchasing.

• Red Flags When Inheriting Tenants:

  • Locks outs and denied access during due diligence.
  • Lack of information from sellers.
  • Buildings in poor condition may indicate lower-quality tenants.

• Financial Perspective:

  • Tony: If the “deal is good enough,” the short-term pain of a bad tenant (even with unpaid rent) may be negligible in the long, multi-year hold.

Notable Quotes

• “If it goes south, you guys eat the loss. Your partner has no liability to have to pay you back... Maybe being a debt partner is actually better for you. Or you could do both.”
  — Ashley ([03:16])
• “Worst case scenario, you put something in place for the day you take ownership—you’re working towards making sure they know that their lease is terminated at the end of the eight months.”
  — Ashley ([14:45])
• “Set yourself up for the expectation that you may need to clear house and get other people in there... make sure that you’re baking it into your numbers.”
  — Ashley ([19:47])
• “Don’t let a good deal slip through your fingers because there’s a tenant there and you don’t even know how great of a tenant it is.”
  — Tony ([17:16])

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Segment 3: Scaling a Short-Term Rental Portfolio in a Challenging Market

[25:33–33:41]

Discussion Points

• The Reality of STR Management:

  • STRs require more hands-on effort and have higher guest turnover than long-term rentals.
  • Industry challenges highlighted by Sonder’s bankruptcy—scaling hundreds or thousands of units is tricky due to quality control and operational complexity.

• Viable Scale for Individuals:

  • For most rookies, building a manageable portfolio of 5–20 units is feasible if you implement smart systems and standard processes.

• Standing Out in a Saturated Market:

  • Standard Airbnbs (“bland apartments”) are losing ground; unique amenities and experiences are now essential.
  • Ashley shares her personal shift in preference from Airbnb to hotels unless the STR offers something notable:
    “I would rather stay in a hotel. I have decided I do not like staying in an Airbnb...unless it’s something unique.” ([28:28])

• Hotels vs. Airbnbs:

  • Tony notes that for big groups, family gatherings, or special occasions, Airbnbs still have an edge on convenience and privacy.
  • Both hosts note the gap in price between hotels and STRs is narrowing in many markets.

• Is the Market "Too Unfavorable"?

  • All real estate investing strategies face headwinds right now, but “the strategies themselves are not broken.”
  • The key is adapting to market realities—be it saturation, changing traveler preferences, or rising costs—by differentiating your product and conducting thorough market research.

• Market Research is Critical:

  • Episode 648 (December 3) is recommended for deeper insight on data and research in STRs.

Notable Quotes

• “Is it more work? Yes. But is it possible? Absolutely. You just got to make sure you put the right pieces in place.”
  — Tony ([28:22])
• “Now when I compare, it's not really that big of a price difference at all [between Airbnbs and hotels].”
  — Ashley ([29:25])
• “You have to tweak and adjust your strategy…to fit the reality of today's environment.”
  — Tony ([31:54])
• “Really look at the market that you want to go into and see what is going to make yourself stand out from all the other listings too.”
  — Ashley ([32:42])

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Memorable Moments

• Ashley recalling a red flag on a multifamily purchase:
  “The first red flag was when we went to see the property. We couldn’t get into that unit.” ([18:20])
• Tony drawing an analogy between sellers waiting to close and “senioritis” in high school—people stop caring once their responsibilities are almost done. ([17:08])
• Ashley’s honest STR travel confession:
  “I don't want to have a checklist of things to do in the morning, like take out the garbage… I just want fresh sheets!” ([28:28])

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Quick Reference Timestamps

• Partnerships & Structuring Deals: 00:30–06:50
• Inheriting Tenants & Tenant Negotiation: 09:10–20:43
• STR Scaling & Market Conditions: 25:33–33:41

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Final Takeaways

• Be clear about your risk and reward expectations in partnerships—structure deals for mutual comfort and legal protection.
• Inheriting tenants is a mixed bag; due diligence, clear planning, and an understanding of local laws are crucial. Factor in all scenarios before closing.
• Scaling STRs is possible, but requires operational discipline and a differentiated product, especially as guests become more discerning. The “plain vanilla” Airbnb no longer wins in crowded markets.

The hosts stress that success, especially for rookies, isn’t about following cookie-cutter playbooks but taking the time to understand your own risk tolerance, building systems, and staying alert to changing market dynamics. They encourage listeners to share their stories and remind everyone that even questions with “messy” answers are worth asking.

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Transcript

[A]

Let's be honest, figuring out how to partner with a contractor, navigating tenant leases or scaling a short term rental portfolio isn't something you learn from a textbook.

[B]

I mean, these are real life curveballs that rookie investors are facing right now. And Today we're answering three questions straight from the BiggerPockets forum to help you avoid these common pitfalls.

[A]

This is the Real Estate Rookie podcast. I'm Ashley Kerr.

[B]

And I'm Tony J. Robins. And with that, let's get into today's first question. All right, so question one comes from Steve in the BiggerPockets forums. And Steve says, I found a partner that I like to start flipping houses with. He's very well qualified and he actually reached out to me to partner up. Our goal is the same. Start a flipping business. He used to own his own contracting business for six years and is now the on site manager of a construction company that builds apartments and subdivisions. I'm bringing the capital. He's doing some of the labor himself and charging me nothing for labor. Anything he can't do. He will charge me book costs for a specialist labor and cost for materials. He offered me a 7030 partnership. I figured instead of a private loan, 70% sounded pretty appealing. I'll also get to help out and learn some trades with him. My main concern is he doesn't have enough cash now to have any skin in the game or cover any upfront fees. I asked if he'd give me a personal guarantee on a private asset around 10k. He said he doesn't own anything outright that's worth 10k. Does anyone have protection recommendations so I can sleep a little easier? I'm getting cold feet since I'll have the skin in the game financially if something goes south on the flip and he doesn't have enough to pay me back or we lose the money. How will he pay me? All right, this is a great question. I think first Ash might be beneficial just to to discuss the different types of partnerships. So there's a debt partnership and then there's there's an equity partnership. Steve, for you, it sounds like what you guys are pursuing is an equity partnership. If you really want to make sure that you're protecting yourself, then maybe a better scenario here is for you just to be this person's private money lender where you give them a loan, and with that loan, now you get a lien against the property. You get a promissory note that outlines how much he's supposed to pay you back. And if for whatever reason he doesn't repay you. Well, now you've got a means to go after the property and try and recoup some of what was invested. That is the way that, that a debt partnership works. The equity partnership, on the other hand, is like you guys going into this deal together. So there really isn't, I mean, and again, you can set up the partnership any way that you want. But typically in an equity partnership, you guys are sharing in both the upside potential of that deal and the downside potential of that deal. So if things do go sideways, there is no he's paying me back. It's, hey, I brought in the capital, he's bringing in his time. And this is kind of the risks that we're taking is that, hey, maybe he doesn't finish or maybe this does go wrong. So I think in an equity partnership, you get more of the upside, but part of what you're accepting is that downside risk as well.

[A]

I think one of the things that I noticed at the end of the question as to, you know, he's asking if he can do, you know, have a lien on some, some personal property that the contractor has or, you know, how will he make sure that he's paid back if the flip goes south? And that's one really important thing about being an equity partner is they have no obligation to pay you back just because they're the other partner in the deal. You are partners on this. If it goes south, you guys eat the loss. Like, your partner has no liability to have to pay you back for one, what, sell them the deal. So I agree with Tony. Like, maybe being a debt partner is actually better for you. Or you could do both. My very first deal, I had a partner who was an equity partner and the debt partner. So he actually got monthly payments every month. Five and a half percent he was making on his money. And he was also 50% owner of the property. Now, this was a very good deal for him. Like, I probably wouldn't recommend doing that for your first deal is like giving up that much equity. But also you're on the side that my partner was where you're getting all of these benefits. So maybe instead of 70, 30, you actually do the 50 and then you do, you know, you're making five and a half percent interest and you get monthly payments to yourself. Or, you know, you wait until the end of the deal and actually pay yourself interest or pay yourself off at the end of the, the deal. So when you sell the flip, your re, your balance is repaid to you. The capital is repaid to you, then maybe you're even making, you know, even if it's a small amount of 3% interest or something like that. So I think be very confident and you know, the difference between the responsibility of being a debt partner compared to being an equity partner. But I think in this scenario that you have the opportunity to be both. So you could put the lien on the property as the debt partner so that when the property goes to sell, you're getting paid first before you and your partner get a capital distribution from any profit that is paid out. So going, I would try this, this way out for your first deal together. And then maybe if it goes well and down the line you can just say, you know what, I don't need to do the, the debt partnership part, let's just do full on equity.

[B]

Yeah, I think, yeah, you bring up a really good point, Ash. And again, it goes back to what we say often is that there's no right or wrong way to structure a partnership. It's really more about what the two of you feel most comfortable with. But I think that maybe one of the questions that you guys should answer amongst yourselves is, well, what happens if your contracting partner doesn't fulfill his duties? Like what happens if he misses a lot of deadlines or maybe just hasn't shown up to the job site or, or the work that he promised to do isn't being done? What then can you do as a money partner to kind of course correct this deal? And maybe it's like, hey, if you miss deadline by X number of weeks or certain milestones aren't met within a certain timeframe, then maybe you as the person who brought the capital, has the ability to swap him out with someone else. Or maybe he loses his 30% equity in that deal and now there's something else. So.

It feels like maybe there's some solutions here, but honestly, I feel like the best solution if you've already got some question marks, is just to be a straight up debt partner. That'll simplify this in a way that I think allows you to sleep a little bit easier at night. You get more of a quote, unquote guaranteed return because there's that note there and you don't necessarily have to worry about like, hey, what happens if the deal doesn't go according to plan? Because if it doesn't, you're still obligated to kind of get that return. Now what you actually get, it is a different story. But at least you have that, that obligation there that he's supposed to pay you back.

[A]

We're going to take a short break, but when we're going to come back, we're going to go over a scenario where someone's purchasing a duplex that has a tenant in place, but they also want to live in the property. We'll be right back.

[C]

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[D]

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[C]

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[A]

Okay, welcome back. Our next question is from Isaiah in the Bigger Pockets forums. I'm planning to make an offer on a duplex listed around 455,000 here in Raleigh and planning to live in one unit and rent out the other. So owner occupancy is a must for my FHA loan. One side is vacant. The only wrinkle is that the tenant on the other side has a lease that runs until July 2026, about eight months from now. My goal is to have vacant possession at closing or as soon as reasonably possible after without putting pressure on the tenant or making the seller's life difficult for those who've been in similar situations. What's the best way to structure this in the offer so it's fitting fair for everyone, seller, tenant and myself? Should I ask for the seller to provide notice to the tenant right after due diligence ends, request delayed possession until lease end and possibly negotiate a rent credit? Reduced purchase price to offset holding costs. Include a vacant possession clause contingent upon lease termination before closing? Any examples of how you worded this in your own offers or leases would really help. My goal is to keep this deal smooth and respectable, but still align with the FHA owner occupancy rules. From what I've learned on the BP podcast, inheriting tenants can sometimes be more trouble than it's worth because they're used to the previous owner's way of doing things. I want to make this transition as smooth as possible and avoid stepping in as the bad guy trying to change rules or expectations. So one thing I want to clarify here, Tony, and tell me if you understood it the same way.

Is he thinking that he needs to have the whole property vacant upon possession or he just wants to have it?

[B]

Yeah, my, my understanding is that he just wants to have a clean slate when he steps in because one side is already vacant for. For him to move into. But yeah, it sounds at the bottom down there, right? From what I've learned, inheriting tenants can sometimes be more trouble than what it's worth. I want to make this transition as smooth as possible and avoid stepping in as a bad guy. So sounds like he's. He's just got maybe some fear and hesitation around inheriting tenants and just wants like a. A clean break.

[A]

Yeah, because he said my goal is to keep this deal smooth and respectful, but still align with the FHA owner occupancy rules. So I just to be clear, if anyone did think that, that you can have one unit rented out, you just need to have at least one unit for you to live in. So like this property as is does comply with FHA rules, you don't need to have the whole thing vacant for you to move into when you close on the property. So inheriting tenants, I've had the good and I've had the bad. I've had one lady that I inherited and when I inherited her, she lived there for 30 years and it's been eight years and she's still living there. Wonderful, wonderful tenant. Also had people where we've evicted them within the first six months of taking over the property. So it's definitely is difficult because you aren't the one that screened the person. So you don't have the background. You don't, you know, know what their credit score was, you don't know their background check. And you didn't get to decide who's moving in or you know, into the property. So I can understand where this person is coming from, is wanting a clean slate. So when you're negotiating with the sellers on this, understand that I don't know North Carolina laws but in if they're anything like New York, that's very, very hard to get a tenant out for just because you want them to move out with no significant reason. So usually that's non payment of rent or if the, the lease is up for renewal. But if they do have a lease in place, it's very, very hard to get someone out. The thing that I could offer you to suggest is to do like a cash for key situation where you ask the, the sellers, you could ask them first if they would be willing to have the property vacant. Maybe the sellers already know a way to make that happen by offering cash for keys or you know, the, they know some way to get the tenant out of the property. You could put that in. If they say no, they're not going to do that, then see if they would be willing to have you offer cash to the tenant to vacate before they move out of the property. So, so the only problem is with this is if I was the seller of the property, I would be very cautious of getting the property completely vacant because what if we don't close on the property and now I'm stuck with a vacant building with no tenant in place and we didn't close on the property and now I have to start the whole sales process all over again and who knows how long that could take and now I'm sitting vacant. So also think about the seller side of things. But another thing you could do is just wait until you have, you know, ownership of the property and you could serve notice that you are going to terminate their lease at the end of their lease and it's up and it's not up for renewal. And again this is dependent on state laws. Like I'm pretty sure California can't even do that. You have to offer renewal. Unless it's like something crazy like you're demoing the property or you're moving a family member in, something like that. So make sure you know your state laws. But worst case scenario, you put something in place of the day you take ownership, you're working towards making sure they know that their lease is terminated at the, the end of the eight months. But so step one, just ask the sellers, ask if they would be willing to have it vacant. The next step is to offer a cash for keys, you know, see if they would be okay with that, that you offer cash for keys to the tenant that's in the property to move out by the time you close on the property. And then third is have a plan in place for when you take ownership, for when that lease does expire, that they are vacating the property.

[B]

Ash, let me ask you a follow up question. I think in my mind it part of it comes down to how good of a deal this actually is. Because if you're getting like a really killer deal, even if this tenant doesn't pay for eight months, like if you plan to hold this thing for the next five, 10, 15, 20, 30 years, eight months out of that timeframe is a relatively small percentage. So I guess the question that I want to ask you, Ashes, let's say that the, maybe the current owner tells the this new buyer, man, these tenants have been a real pain in the butt. Actually hate being their landlord. Like they complain about everything. They pay on time, but they're just like hard to deal with. Would you if it was like a really killer deal, still buy that and knowing that, that it's an eight month lease?

[A]

Yeah, I would. Because I also look at it as like, okay, here's one of the other things he said was what if I do delayed possession where we wait for closing and then they're getting a credit for holding costs or whatever during that time. But, but you as the buyer of the property, if they know this property is sold, but you're taking, you know, delayed possession of the property till that person has moved out, are they Going to care about the property? Are they going to. I'm buying a house right now where I saw it in the spring. We just went under contract. So this is like almost six months later. The gutters are falling off. I was looking at pictures from the spring compared to how it looks now. And just from it sitting for six months of them, like just knowing they're going to sell the property and not really, they're not, they didn't put it on the mls, anything like that. It's like, I cannot believe how dilapidated it looks just for the six months from nobody living there, nobody taking care of it. And that's what I would worry about too, is that delayed possession, as in, you know, they're not going to take care of the property. And just like as a seller too, I wouldn't, I would just want to offload the property. Like there's a reason I'm selling it and I don't want to wait eight more months for the, the buyer to take possession of it too.

[B]

Yeah, that's true. It's, you know, my oldest son is a senior in high school right now, so we're having a lot of talks about senioritis and it's almost the same thing. It's like when you can see the finish line is so close, you kind of take your foot off the gas. So, yeah, I didn't, I didn't think about that from the seller's perspective. But I mean, yeah, I think if it's, if it's a good deal, Isaiah, I would say still move forward with it. Don't let a good deal slip through your fingers because there's a tenant there and you don't even know how great of a tenant it is. And like, again, in a worst case scenario, maybe just underwrite, like, hey, what happens if they didn't pay for the next eight months or even the next 12 months? Right. You've added some additional time to evict them if you need to. But if they didn't pay for 12 months, what does this deal look like? If I had to float this by myself, since it's a house hack, there's a chance that maybe whatever you're paying for your new mortgage is the same that you've been paying in rent anyway. Right? So I think that there's maybe some other elements to consider about whether or not you should, should or shouldn't move forward with this deal. Let me ask, right, because you did say that, you know, you had, you know, one tenant you inherited, lived there for, you know, however many years, others that you wanted to evict on day one? Were there any maybe red flags during the closing, you know, your due diligence period that you maybe overlooked where now you're like, okay, I know I'm always going to look for this to see if I get another bats in it.

[A]

Yeah, there actually was one and it was a four year, actually a five unit before residential. And the first red flag was when we went to see the property. We couldn't get into that unit. The person was working.

The next red flag was that while we were like during the closing process and under contract, one person was already evicted from that property. Then the third red flag is in my final walkthrough inspection the morning of closing. We still can't get into that other unit. And my real estate agent said, yeah, you're not getting into it. He's not allowing access. The seller isn't pushing it. Like you're not, you're not getting into it. And it was that circumstance where it was a good enough deal that it didn't matter. Like we had already baked into our numbers. We are rehabbing every single unit in there. We, you know one thing too was we were under the impression it was a one bedroom but it's actually a studio but it gets crazy amount in rent. So like we, it wouldn't matter I guess but they paid for a while and then they stopped paying and then we had to go through the whole eviction process with them. But I think the fact that they were giving trouble to like get into the union unit and like that was like another red flag.

I think the, and then just like the owner didn't even really know like that that wasn't a one bedroom like I guess so it was, it was just like all of those little things and like somebody else in that property was already like this was pretty like run down when we bought it. So like I guess there was like the red flags of like this isn't the greatest building to live in. So like why would a really good quality tenant want to live here? I guess so I, I think as long as you're setting yourself up for the expectation that you may need to clear house and get other people in there or if you are not knowing the condition of units, like making sure that you're baking it into your numbers, that this could be a full rehab of that apartment too, too not knowing the condition of it. So there's, there were those little red flags.

[B]

So I mean at least Isaiah you know what to look out for and hopefully it still works out for you, you know, and then we'll bring you onto the podcast as a guest and you can talk about how great this story was. Or maybe we'll bring you on as a guest. You can talk about how horrible it was. And the advice we gave you was, was not great advice. So either way, it'll, it'll make for a good story. All right, guys, we've got one question left and we'll hit that right after a quick word from today's show sponsors. But while we're gone, if you're not yet following us on YouTube, there is a real estate rookie YouTube channel. You can find us Eateriki and you can see mine and Ashley's smiling faces. But you know, you guys can be a part of the community on YouTube as well. So we'll be right back after we're from today's show sponsors.

[C]

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[D]

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[C]

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[A]

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[B]

We are here with our third and final question. Another question from the Bigger Pockets forums and this one comes from Jacob. And Jacob says, is anyone successful in scaling a short term rental portfolio? If yes, how many properties do you have and are you still growing or is the current market too unfavorable? It seems that being so much more hands on that they are a little bit harder to scale. But I'm curious what people who actually built portfolios think. That's a great question, Jacob. So 1,000%. It is true that managing one single family short term rental is going to take more time, effort and energy than one single family long term rental. With a long term rental, you know, you're signing a lease for 12 months. You know, to Ashley's point on the last question, you might get someone who stays here for decades with a short term rental. Your average data ration, you know, is probably between two to three to four days depending on the size of the property in the market. And you could have multiple, multiple people coming through on a monthly basis typically. So just that sheer increased volume of foot traffic through the property, the different personalities you're dealing with, the expectations that people have, you know, when they're booking a place for their vacation, it just in and of itself is going to require more work.

Now I think that, I don't know if you saw this actually yesterday, but there's a short term rental company called Sonder. Have you heard of them? So Sonder is to my understanding probably like the biggest.

Like company that operates and manages short term rentals. They've got I believe it was like 9,000 listings. Their, their model was more of like an arbitrage model where they were like leasing out, you know, like nice apartment complexes in a lot of, a lot of places. But they had like 9,000 units. But they just yesterday basically filed for bankruptcy and they're, they're immediately CEASING operations. And I think part of the reason that that happens is because it is a little bit more difficult to scale short term rental operations than it is long term rental. It's part of the reason why companies like Evolve or Vacasa have maybe seen their stock prices take a hit over the last couple of years because the, the quality of their listings decreases when you've got 30,000 listings that you're managing. So when you talk about scale at that level, I think it is difficult now for most of the people listening to this podcast and we talk about scale, we're not talking about 9,000 or 30,000 plus plus listings. Talking like 5 or 10, maybe 15 or 20. Right. If you're like really, really crushing it. And I think that level of scale is very much doable, very much feasible if you set up the right tools, systems and processes to support that.

Is it more work? Yes. But is it possible? Absolutely. You just got to make sure you put the right pieces in place.

[A]

I think one thing that I'm noticing is that like, having these unique experiences and things like that really make you stand out, that it is the people that have the, the blah, the standard Airbnb. And I was one of those people. I had two Airbnb arbitrages that were just boring apartments. You know, they had cute bedding, cute furniture, cute decor on the walls. But like, you can't add an amenity to an apartment. Okay. So I think that was what was really limiting. And just like there have become so, so many Airbnbs that the markets have just become so saturated that you'd need something unique to stand out. And also I, I'm wondering too, and I have no data to back this up. This is all just my personal preference. And maybe other people are feeling the same way. And that's why some of these Airbnbs aren't being successful. I would rather stay in a hotel. I have decided I do not like staying in an Airbnb. I like my room cleaned, I like to fresh sheets on my bed, I like to have a restaurant, I like the amenities, I like having a gym. All of these things that a hotel offers compared to an Airbnb. But if it's something unique and we have like our own sauna, we're, you know, have a big pond or it's on a lake or things like that, then I'm all for it. Or like, maybe if you just have a huge family and you all want to stay together, but if it's just me traveling or just me with my Kids. And it's just like we're already doing something. We just really need a place to sleep. 100%. I am picking the hotel over the Airbnb. I don't want to have a checklist of things to do in the morning, like take out the garbage, you know, so. And you know, like, I don't want to have to bring my own toilet paper if they only supply, you know, one roll for two weeks. So maybe there is, you know, other people like me that this shift has happened also, but I just feel like also in a lot of markets, it's not like that big of a price difference. Like, I felt like for a while like Airbnbs were actually a better price than getting a hotel. But, you know, now when I compare and like, look going somewhere, like, it's not really that big of a difference at all.

[B]

Ash. I do think that's why Airbnb is, is really like, like, I don't know if you've seen some of their, they've been spending a lot on marketing and advertising lately, but like one of their commercials, it's like a group of girls who are sharing one hotel room and there's like one bathroom, one mirror, and then they, they do like the split screen where it's the same girls, but they're in like a four bedroom house and everyone's got their own bathroom. And it's like a bachelorette theme thing. Right. And I, I think that's maybe where Airbnb kind of has a bit of a leg up. There was another commercial where it was a, it was like a, a couple who had went on vacation to like, get away from their kids and they're hanging out at the, the pool at the hotel and there's a bunch of kids running around. You know, they're like, we, we came here to get away from the kids. And then the split screen is them at their own private Airbnb with their private pool and enjoying it that way. So I do think that there, there are definitely a percentage of folks who just like the amenity to come along with, with the hotel and, and what that experience is. But there's definitely still, I think, a growing group of people who like the privacy, the experiences that you mentioned. And then also the ability, like if you're going with a big group, grandma, grandpa, the cousins, the kids, like just to have one big place that you.

[A]

Guys can all stay all set and hang out.

[B]

Yeah, I think there's always a market for that too. So. And I guess that that kind of leads to the Other points of Jacob's question, like, is the market too unfavorable? I mean, you could ask that for every single real estate investing strategy right now. Is it too unfavorable for flipping? Is it too unfavorable for single family long term rentals? Are there challenges now in terms of interest rate, in terms of affordability? Absolutely. But does it mean that the strategies themselves are no longer working? No, it just means you have to tweak and adjust your strategy and how you're executing to fit the reality of today's environment. So people are always investing in real estate as the market's done, you know, whatever it's done. Over the life of the United States, people have always invested in real estate and it's worked out because over time it still tends to be a good investment.

[A]

Yeah. And I think exactly what you said is what you have to consider to see if the strategy will work in your market. So, you know, if you're going into a market where there are a ton of Airbnbs and, you know, just having a plain Jane apartment, doing Airbnb arbitrage, or just getting a house that, you know, has no amenities, you know, are there a million others just like that? And do you need to have something unique and something to stand out too? So really look at the market that you want to go into and see what is going to make yourself stand out from all the other listings too, or what type of property is always booked? Is it one that has the. The bar with all of the different glam sets for the girls to do their makeup for the bachelorette parties? You know, so really doing your market research on what people are actually looking for and want and why they would choose you over another Airbnb or over a hotel to come to that market too.

[B]

Episode 648, which released on December 3rd, we interviewed John Bianchi and Jamie Lane, two. Two folks from the short term rental industry who are experts in the data side of things. And if you want more insights on what to look for, how to do that market research again, go check out episode 648.

[A]

Well, thank you guys so much for joining us for this week's Ricky reply. I'm Ashley, he's Tony, and we'll see you guys next time.

[B]

Hey rookies, if you're watching this, we want you to apply to be a guest on the Real Estate Rookie Podcast. That's right. Ashley and I are looking for amazing stories just like yours to be a part of our Real Estate Rookie Podcast. Now look, you don't need to be an expert. You don't need to have done thousands of deals. Even if you've done one deal, your story could help inspire the next listener.

[A]

As a rookie investor. Especially if you just got your first deal. It is all fresh in your minds and you are the best person to tell your story. Give your experience on how you got it done to help someone someone else get their first deal.

[B]

So head over to biggerpockets.com guest if you want to be a part of our show again. That's biggerpockets.com guest and we'd love to have you on.

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